Thanks for the detailed explanation.

I agree frontrunning is not the 100% accurate wording here it was just meant as a situation where the stabilizer has advantage.

It's not at all clear to me how this would make HBD scale better.

At the moment the demand is not outpacing the supply of the stabilizer. But it can happen as it has happen in the past, more than the 130k then the stabilizer can provide per day. In that situation conversions will start to happen after 1.05. If the fee were lower conversions will start earlier and faster.

The 5% premium was set to discourage someone attempting to profit from the conversion mechanism by manipulating the price of HBD

Not sure what will be this scenario ... if the blockchain always gives you a fixed rate for HBD, the only variable will be the price for HIVE....

Overall HBD is in much better place now then beffore hive to hbd conversions. The DHF is also in a good place in terms of funding and can support nice volume for the stabilizer. Overall I'm all in for the work of the stabilizer. Just not that sure of that 5% fee ...